Notes of an SMM-manager. Psychological traps on the way to a million. Part 1

Hello, this is Anya, the SMM manager of Betatransfer Kassa, back with my small personal column where I share my experience in cryptocurrency investing.

So, let’s talk about something urgent. Saturday evening, I’m calmly sitting at home, finishing my wine. Then I get a message from a friend – Bitcoin has crashed! I rush to check my wallets and exchanges, and spend the entire night watching my balance turn red and drop lower and lower. All my super diversified assets are devaluing. All the money I had mentally spent on vacations and bags is burning away. And my alcohol-affected brain can’t figure out what to do. Buy? Sell? Withdraw? Deposit? Cry?

Take a breath.

In such moments, it’s easy to fall into one or more psychological traps. Let’s briefly go over each; I’ve gathered a whole top 10 for you.

TOP-10 Psychological Traps That Can Make You Lose Money in the Market:

1. FOMO (Fear of Missing Out).You’ve definitely heard about it and experienced it. FOMO drives people to make impulsive decisions, like entering the market at peak prices or investing all their money in a coin that’s about to scam.

2. Sunk Costs. My favorite brain trap. Like a gambler who keeps feeding the slot machine every last coin because he’s already spent so much and “Fortune” will surely smile upon him. My ex kept investing all his and borrowed money into a failing business because it was “too late to quit.” The same thing happens in the market, where traders and investors keep spending money on losing assets due to the money and effort already invested, despite the lack of prospects.

3. Confirmation Bias. Another popular and very common cognitive distortion. Always remember that our brain picks, highlights, and remembers only the information that confirms our existing beliefs and completely ignores other facts. (Hello, conspiracy theory fans!) How this can backfire: for instance, you believe a project is reliable. You’ve found many positive reviews and articles, and your brain just ignored the risk warnings and regulatory alerts. The result – sudden loss of money.

4. Overconfidence. The most experienced drivers get into the worst accidents due to overconfidence and the illusion of control on the road. The same effect applies to a trader with many successful deals under their belt.

5. Herd Instinct or “everyone’s running, so I’m running too.”** We tend to follow and mimic the crowd’s behavior. But remember, just because everyone is doing something doesn’t mean it’s right. This is how scam projects, bubbles, and Ponzi schemes thrive.

Should I continue? Share this article and tag us on social media if you’re interested in finding out which trap I fell into. That will be in part two.